Update (February 20, 2010): Telecom Minister A Raja has said that the launch of MNP is going to be delayed, and will be introduced in Bangalore and Chennai in May, reports Business Line. It’s not clear if he meant a pan India delay, or only the South Zone.

Update (February 3, 2010): Indian telecom regulator TRAI has postponed the launch of MNP in India from December 31, 2009 to March 31, 2010 for all circles. The regulator has said in an explanatory memorandum issued on January 28, 2010, “Considering the present preparedness of various service providers and the process involved, the Government has decided to extend the time for implementation of these regulations from 31st December, 2009 to 31st March, 2010, for all circles.”

Earlier Story (December 9, 2009):

Telcos Not Ready For MNP

India’s Department of Telecom (DoT) might have to reschedule the launch of mobile number portability set to happen on December 31, 2009: State run telcos BSNL and MTNL have informed the government that they are not ready for it, CXOToday has reported. This announcement came close on the heels of the government reiterating that mobile number portability was likely to be rolled out on time. But it is not just BSNL and MTNL who are unprepared – industry executives implementing MNP for private operators told MediaNama that two GSM telcos are also lagging behind, and one of them may not be ready till January, and the other March 2010.

BSNL, however, says it needs time to sort out issues regarding numbers that are under observation of law enforcement agencies. TRAI had stated in this case that MNP will not be permitted if there is a pending request for change of ownership of the mobile number.

The DoT had informed the industry of the deadline on March 9, 2009 to ready their networks, upgrade their infrastructure and enable necessary interconnect agreements.

No 3G Auction Notice Inviting Applications Yet

The DoT has also published an update regarding India’s 3G auctions, saying that the “Notice Inviting Applications” is still being finalized. The notice was supposed to be issued yesterday, and this might delay the entire process of the 3G auctions, since applications can now ask for more time to apply. Remember that at the 3G pre-bid conference, telecom operators had raised several issues, particularly the guidelines regarding M&A in Telecom in India, and the guidelines regarding allocation of 2G spectrum, which impacts their bid. The DoT has said that “The NIA will therefore be issued shortly”, but we know that when it comes to policy, “shortly” can be a very long wait.

How MNP & 3G Auctions Are Related

As we had pointed out previously, incumbent telcos are the ones that can expect to be most affected by MNP – the primary reasons being poor network quality, billing issues and inefficient customer care. New telcos Tata DoCoMo and Uninor have launched and more are setting up in India; older operators  can not be blamed for feeling threatened and trying to delay MNP just to buy some time.

Their chance to retain customers and offer better services to compete with these new telcos depends upon the launch of 3G – which would mean better network quality and more content, services that would appeal to subscribers and hopefully, prevent them from churning out. But the government has been delaying the 3G auctions for over a year and with the market getting crowded, consolidation has become a critical issue that needs clear regulations. So while the industry body COAI is focussing its efforts on the topic, the divide between old and new telcos continues to grow – Etisalat recently accused COAI of being biased and there is a tug-of-war for subscribers waiting to happen.

If the 3G auctions pan out, which seems unlikely in the near future, the problem could have been solved and major telcos would have had their chance to upgrade to 3G, then implement MNP and maybe suffer less churn. But currently the outlook for them is grim.

Related

Mobile Number Portability In India At Rs. 19 From Dec 31st 2009
The Price Of Mobile Number Portability In India; New Telcos Vs Old
Rules & Criteria For Applying For Mobile Number Portability In India